Why Greylock capped its new fund at $1.5B when it says it could have raised more

While galore top-tier task firms support raising massively larger funds, Greylock Ventures, 1 of the oldest and astir prestigious task firms successful Silicon Valley, is intentionally resisting the inclination of ballooning money sizes.

On Tuesday, the 61-year-old steadfast announced that it had raised a $1.5 cardinal 18th fund. The fig is 50% higher than its erstwhile $1 billion conveyance from 2023 and astir matches the superior the steadfast raised crossed effect and flagship funds during the pandemic. Still, Greylock spouse Saam Motamedi told TechCrunch that Greylock could person easy raised a “multiple” of that figure, suggesting the concern decided restraint was the amended way astatine a clip erstwhile money sizes crossed the manufacture support climbing.

“Our ngo is to beryllium the astir important spouse to the astir important entrepreneurs,” Motamedi said. The steadfast prides itself connected introducing its portfolio companies to apical engineers and imaginable customers, arsenic it did for Baseten, an AI infrastructure startup that is present valued astatine $13 billion, aft archetypal investing successful its Series A successful 2022. But Motamedi said Greylock tin connection that level of enactment lone by keeping the fig of companies it backs small.

The firm’s 10 partners marque lone 1 oregon 2 caller investments each annually, a gait Motamedi said volition effect successful astir 25 portfolio companies from this fund.

Like its predecessors, the caller money volition absorption chiefly connected incubating companies from the earliest stages and starring effect and Series A rounds. This is wherever Greylock has built its reputation; the steadfast has a beardown way grounds of starting companies from scratch, astir notably information elephantine Palo Alto Networks, which launched wrong Greylock’s offices 21 years ago, and the email information startup Abnormal, which Greylock incubated successful 2018 and that was past valued at $5.1 billion.

Even so, Greylock doesn’t instrumentality strictly to early-stage deals. It volition besides backmost high-potential, later-stage companies adjacent if it “missed them aboriginal on,” Motamedi said. The firm’s 17th money included 3 specified growth-stage bets: Anthropic, Revolut, and Wiz.

The steadfast made its archetypal concern into Anthropic erstwhile the AI institution raised its Series F astatine a $183 cardinal valuation. “It’s the largest concern successful the firm’s history,” Motamedi said.

Motamedi estimates that astir 15% of the caller money volition beryllium deployed into later-stage startups, but helium maintains that Greylock remains fundamentally an early-stage investor.

As proof, Motamedi said that erstwhile the partners conscionable each Monday to reappraisal their concern pipeline, the docket consists chiefly of people’s names alternatively than institution names.

“We’re getting to cognize radical adjacent earlier they commencement a company. It’s truly a stake connected the person,” helium said. “Often the institution doesn’t adjacent exist.’”